Surface temperature on the Earth have risen at a record pace in recent decades, creating risks to life, ecosystems, and economies. Climate science warns us that further warming is unavoidable over the next decade, and probably after that as well. Climate change poses a real threat and a huge risk to banks as key providers of finance for commerce and industry.

Climate change is putting banks at risk. This risk is being driven by two requirements facing the banking sector:

  1. Banks need to manage their own financial exposures, and these exposures are at risk because of climate change.
    • As physical and transition risks emerge, corporates will become increasingly vulnerable to value erosion that could undermine their credit status.
    • Risks may become apparent in such effects as coastal real-estate losses, land redundancy, and forced adaptation of sites or closures.
    • These may have both direct and indirect negative impacts on banks’ balance sheets, including an increase in stranded assets, uncertain residual values, and the potential loss of reputation if banks, for example, are not seen to support their customers effectively.
  2. Banks are also being driven by regulatory pressure to help finance a green agenda, a process that is critical to temper the impact of global warming.
    • Renewable energy, refurbishing plants, and adaptive technologies all require significant levels of financing. These improvements will cut carbon emissions, capture and store atmospheric carbon, and accelerate the transition away from fossil fuels.
    • Oil and gas, power generation, real estate, automotive, and agriculture present significant green-investment opportunities.

This course examines the outlined problems that banks are facing and provides practical guidance to assist them in complying with ESG requirements.

This course covers;

  • ESG in a nutshell
  • ESG in banking
  • Opportunities & challenges for banks
  • What is driving the banks’ ESG agenda?
  • Principles for banks in managing climate-risk
  • Achieving climate change risk maturity
  • Using green energy
  • Climate stress tests for banks


Course Key Concepts: Banking, Climate change, Diversity, Employee relations, ESG, ESG risks, Governance, Human rights, Impact investment, Investment, Renewable energy, Social impact, Sustainable investing, Sustainability.

Learning Objectives
  • Explore the opportunities and challenges facing banks in a world of global warming.
  • Identify the principles that banks use in managing climate risk.
  • Discover what is driving the banks’ ESG agenda.
  • Recognize what is needed to achieve climate change risk maturity.
Last updated/reviewed: August 21, 2023
3 Reviews (8 ratings)


Anonymous Author
The sound on the video wasn't clear, so I read through the slides. The material was OK (not great) for the ESG topic (which I've done a good deal of reading on, just not for CPE credit). The answer options in the test could often have multiple correct answers based on info in the slides, and terms weren't consistent with what I've seen elsewhere. Is this the only ESG class on Illumeo?

Anonymous Author
Provided an overview but some real life practical examples of what banks are currently doing or are challenged with would be helpful.

Anonymous Author
Great course for beginners. Provides an overview of ESG concepts and how banks should manage ESG risks.

Course Complexity: Foundational

A basic knowledge of ESG would be an advantage.
It is recommended to take Other Segment of the series course by Stanley Epstein.
Understanding Environmental Social and Governance (ESG)

Education Provider Information
Company: Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact: For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Instructor for this course
Course Syllabus
  Introduction to Understanding ESG in the Banking Industry4:40
  ESG in a Nutshell3:56
  ESG in Banking10:26
  Opportunities and Challenges for Banks4:30
  What is Driving the Banks ESG Agenda?8:00
  Principles for Banks in Managing Climate Risk10:25
  Achieving Climate Change Risk Maturity6:42
  Climate Stress Tests for Banks4:18
  Course Wrap Up2:25
  Understanding ESG in the Banking Industry58:46
  Slides: Understanding ESG in the Banking IndustryPDF
  Understanding ESG in the Banking Industry Glossary/ IndexPDF